Session 8: Planning now for later in life – buying a home and planning your pension

Introduction

Welcome to the last session of the course. Bobby once again introduces you to the main themes and explains their context.

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Transcript

BOBBY SEAGULL:

In this last session, you look at two aspects of personal financial management that you need to be aware of from early adulthood- how to go about buying your own home and how to organise a pension to provide you with income in later life.

When you're young, neither of these things may seem relevant to you, particularly planning a pension. But honestly, in both cases you need to know about the choices available to you as early in life as possible, because by the time it feels relevant, it may be too late.

Around 2/3 of households in the UK are owner occupied, bought not rented, but the price of a house sounds huge, so knowing what to do to get onto the housing ladder is essential, and the earlier you start to plan and save for your pension, the better the outcome will be for when you retire from work.

Starting a pension plan in your early 20s makes sense. Leaving it until you're in your 40s and 50s is not good sense and risks you being in poverty or maybe unable to retire at all. By looking at pensions, you'll also learn more about the risks and returns you get from different types of investments.

So let's look at what you need to know now so you can make good and timely decisions from an early age about buying a home and investing for your future pension. Enjoy this last session of the course.

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Here you investigate two aspects of personal financial management that you need to be aware of from early adulthood:

• how to go about buying your own home
• how to organise a pension to provide you with income in later life.

If you’re wondering how either of these has any relevance to you – particularly planning a pension – you’re not expected to take action now but simply to understand the choices available to you. It’s important that you’re equipped with certain insights as early in life as possible, so that your decisions as you get a little older are based on sound knowledge.

Around two-thirds of households in the UK are owner-occupiers – meaning that their properties have been bought, or are in the process of being bought, by the occupiers. Knowing what to do to get on the housing ladder is essential.

The earlier you start to plan and save for your pension the better the outcome will be for you in later life when you retire from work. Starting a pension plan in your early 20s make sense. If you leave it until you’re in your 40s and 50s you risk being in income poverty when you retire. Here you’ll learn more about the risks and returns from different types of investment.

You finish this session and the course with another longer quiz of 15 questions based on the content of this session as well as Sessions 5, 6 and 7.

By the end of this session, you should be able to:

• understand what you need to do to buy a property
• understand how to plan for a good pension
• know what pension you can expect from the state
• understand the alternative pension products and the factors that determine how much pension income you get from each
• understand how the four-stage financial planning model can be used when making important financial decisions.